Economy In U.S. Grows At 1.5% Rate On Consumer Spending
Source: Bloomberg News
The U.S. economy expanded at a slower pace in the second quarter as a softening job market prompted Americans to curb spending.
Gross domestic product, the value of all goods and services produced, rose at a 1.5 percent annual rate after a revised 2 percent gain in the prior quarter, Commerce Department figures showed today in Washington. The median forecast of economists surveyed by Bloomberg News called for a 1.4 percent increase. Household purchases, which account for about 70 percent of the worlds largest economy, grew at the slowest pace in a year.
Consumers are cutting back just as Europes debt crisis and looming U.S. tax-policy changes dent confidence, hurting sales at companies from United Parcel Service Inc. (UPS) to Procter & Gamble Co. (PG) Cooling growth makes it harder to reduce unemployment, helping explain why Federal Reserve Chairman Ben S. Bernanke has said policy makers stand ready with more stimulus if needed.
Were starting the second half on a not-so-good footing, Michael Hanson, a senior U.S. economist at Bank of America Corp. in New York, said before the report. The economy is slowing notably. Given the risks, it is unlikely the Fed will sit on their hands the rest of the year.
Forecasts of 82 economists in the survey ranged from gains of 0.7 percent to 1.9 percent. The GDP estimate is the first of three for the quarter, with the other releases scheduled for August and September when more information becomes available.
Read more: http://www.bloomberg.com/news/2012-07-27/economy-in-u-s-grows-at-1-5-rate-as-consumer-spending-cooled.html
Hissyspit
(45,788 posts)earthside
(6,960 posts)If the real inflation rate were calculated in the GDP number, I suspect that it would be flat or show negative growth.
There are statistics and there is the real world where real people buy food, pay healthcare premiums, pay fees, pay tuitions, buy gasoline, etc. --- and it is very apparent that we have been going backwards for the past several months.
The Obama reelection campaign is going to get in trouble if it looks out of touch by hyping 'positive' GDP numbers that conflict with people's everyday experiences.
We're in economic trouble and I want to know how we are going to get out of it.
Pres. Obama needs to be bold and announce that he will propose breaking-up the big banks, will support a new Glass-Steagall, will not sign-on to a job-killing Trans-Pacific Partnership Agreement .... yeah.
coalition_unwilling
(14,180 posts)the "Do-Nothing Congress" v 2.0, to innoculate his administration against charges that he is responsible for the economic stagnation. The American people love a scrapper, a la Harry S. Truman and 'Give 'em hell, Harry,' and this would maybe lengthen Obama's coattails for down-ballot races.
That's my personal opinion and I can see arguments for continuing the current course of 'branding Romney' also. Maybe running the two themes (Romney out of touch and do-nothing Congress) on parallel tracks?
bhikkhu
(10,720 posts)Even if it weren't I would question the idea that we need to grow faster, as economic growth is the primary driver of fossil fuel consumption, which is the primary driver of global climate change, which is just starting to "get real" for much of the country.